Analysts highlight Shaw’s competition concerns

Shaw Communication’s second quarter results largely matched analysts’ expectations, but concerns about growing competition are hanging over the company.

• “Shaw Cable is showing accelerating basic cable and Internet market share losses to TELUS and ARPU (Average Revenue per user) per RGU (Revenue generating unit) is continuing to decline,” said Dvai Ghose, an analyst at Canaccord Genuity. “This is turning into the slowest wireless launch that we have ever seen and can only benefit TELUS who is using its strong wireless cash flows to invest and beat Shaw in TV and broadband in the West…we see no reason to own Shaw shares at these levels.”
• “Shaw’s Q2 results reflect continued pressure from TELUS on the core cable business, as cable EBITDA and subscriber metrics were weak,” said Tim Casey, an analyst from BMO. “We recently downgraded Shaw to Market Perform, based on concerns regarding the competitive threat from TELUS, which we believe is accelerating.”
• “The company highlighted that the competitive environment has presented an increased level of risk to the company’s forecasts,” said Maher Yaghi, an analyst at Desjardins.